Businesses wasting millions on advertising - Business Works
BW brief

Businesses wasting millions on advertising

Glenn Granger, CEO, marketingQED British companies are wasting millions on advertising and marketing by relying on tradition and gut feeling rather than data, according to Glenn Granger, CEO of marketingQED in his book just published, Raindancing: why rational beats ritual.

Glen contends that few businesses accurately use data to forecast or evaluate campaigns, meaning that ineffective marketing is leading to as much as 20% of potential profits being missed.

"John Wanamaker famously claimed that half of all advertising is wasted, but it’s impossible to know which half," said Glenn. "That shouldn’t be true today as it’s perfectly possible to very accurately predict what next year’s marketing budget should be, how much you should invest in each channel to deliver the sales you want. However, the problem is that most marketers haven’t had the tools to do this. They’ve tended to allocate spend on TV because that is what their company has always done, or they decide to set budgets at a certain amount because they figure that the more money their department gets, the better. This is particularly true of 'offline' marketing, which traditionally has been more difficult to quantify than its online equivalent. A century on from John Wanamaker and very little has changed."

In the book, he argues that new technologies allow marketers to combine their experience and intuition with quantitative data and insight – in particular adaptive modelling; a technique that uses data from past marketing campaigns to create mathematical algorithms that simulate future marketing activity and forecast the results.

Raindancing: Why Rational Beats Ritual

"Today, advances in technology mean it doesn’t take rocket scientists – or even much money – to be more data-driven about your marketing," continued Glenn. "Anyone who has seen the film Moneyball can see how by looking at the numbers as well as more traditional metrics, a failing baseball team became hugely successful. The same comparison can be made with marketing decisions. If brand owners use data that measures the effectiveness across all channels, in conjunction with their own intuition, it’s possible to deliver more profitable results from their marketing."

Glenn cites several examples of data-driven marketing organisations, including how mobile phone operator 02 increased its investment in the millennium dome after seeing a correlation between customers’ priority ticket sales at the venue and those customers’ perception of the 02 brand.

Likewise, supermarket Sainsbury’s used econometrics to deduce that an in-store campaign to get customers to try new products had added £137.5m in extra profits over two years.

You can find Glenn's book on Amazon here: Raindancing: Why Rational Beats Ritual

Tweet article
BW on TwitterBW RSS feed